Is this a scam or a trap? Do landlords really collude with student loan institutions, or are landlords simply leveraging 1. the necessity of their resource and 2. the lack of rent control? There's no basic regulation on what fraction of income landlords can charge tenants, and landlords get critical financial information on tenants. If loans are so easy to obtain, there's zero incentive for landlords not to gouge tenants (by progressively raising rents).
I don't see how any explicit fraud is happening. I also don't see how things will ever get better without tighter regulation of rents. Well I guess we could turn down loans and kill the demand ...
It's certainly not explicit fraud, but it is a type of social scam, which becomes a trap, and yes, I think the solution is to turn down the loans, and force the landlords to deal with lower rents, because, as you say, now they have tremendous price gouging incentives. And while it's bad in Berkeley, it's really bad in Westwood, where the UCLAers live.
One of the difficulties with reducing student loans (in volume) is that fewer people will then have access to education.
Besides rent control, one option could be for the Fed to cut debt issuance slightly and to explicitly fund school-owned student housing. This would cut out the greedy landlords without having an especially negative impact on local economies-- the schools would still pay to maintain the properties. Doesn't help private schools much, but a lot of for-profit private schools are abusing student loan availability too.
Comments
Is this a scam or a trap? Do landlords really collude with student loan institutions, or are landlords simply leveraging 1. the necessity of their resource and 2. the lack of rent control? There's no basic regulation on what fraction of income landlords can charge tenants, and landlords get critical financial information on tenants. If loans are so easy to obtain, there's zero incentive for landlords not to gouge tenants (by progressively raising rents).
I don't see how any explicit fraud is happening. I also don't see how things will ever get better without tighter regulation of rents. Well I guess we could turn down loans and kill the demand ...
It's certainly not explicit fraud, but it is a type of social scam, which becomes a trap, and yes, I think the solution is to turn down the loans, and force the landlords to deal with lower rents, because, as you say, now they have tremendous price gouging incentives. And while it's bad in Berkeley, it's really bad in Westwood, where the UCLAers live.
One of the difficulties with reducing student loans (in volume) is that fewer people will then have access to education.
Besides rent control, one option could be for the Fed to cut debt issuance slightly and to explicitly fund school-owned student housing. This would cut out the greedy landlords without having an especially negative impact on local economies-- the schools would still pay to maintain the properties. Doesn't help private schools much, but a lot of for-profit private schools are abusing student loan availability too.